FSB renews calls for business rates reform
The Federation of Small Businesses has reiterated that property taxes in London need rapid reform, or that the capital’s economy could struggle.
It is claimed that the businesses are facing disproportionate increases in business rates, with firms in the capital facing a £1.2 billion rise this year.
The FSB has also suggested that the amount collected from London’s firms totals nearly a third of all business rates collected in the UK.
Now the federation is calling for the threshold at which firms pay business rates to be increased, so that companies can have more finance available to focus on growth and product development.
Currently, firms require a rateable value of £12,000 not to pay rates, but the FSB has said that should be increased to £20,000 in inner London, and to £15,000 in outer London.
More regular rates revaluations could also support businesses by ensuring that tax increases are more manageable – April’s revaluation saw operational costs surge for the majority of small firms.
For those lacking sufficient working capital, the increases in operational costs means they either need to relocate or restructure their processes to avoid financial woe.
Situations can be recovered when company performance drops, with turnaround management available to assist with financial restructuring, cash stabilisation, contingency plans and a range of other financial methods.
The FSB’s London policy chair Sue Terpilowski said many London businesses are “still reeling” from the revaluation in April and said that everyone needs to “understand how the cost of doing business in the capital is blighting opportunities”.
The lobby group has also questioned whether cuts at the Valuation Office Agency, which checks business rates, will impact on how rates appeals are handled.
There are concerns that the process may be delayed as a result, thus slowing down potential compensation pay-outs that small firms may be entitled to.
London Mayor Sadiq Khan has also called for change, having suggested that the “current system is unfairly skewed against the capital”.
By Phil Smith